3M 2015 Annual Report Download - page 90

TableofContents
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Absolutereturnconsistsprimarilyofpartnershipinterestsinhedgefunds,hedgefundoffundsorotherprivatefundvehicles.
Corporatedebtinstrumentsarevaluedateithertheyieldscurrentlyavailableoncomparablesecuritiesofissuerswithsimilarcredit
ratingsorvaluedunderadiscountedcashflowapproachthatutilizesobservableinputs,suchascurrentyieldsofsimilarinstruments,
butincludesadjustmentsforcertainrisksthatmaynotbeobservablesuchascreditandliquidityriskratings.
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OtheritemstoreconciletofairvalueofplanassetsincludethenetofinsurancereceivablesforWGTradingCompany,interest
receivables,amountsdueforsecuritiessold,amountspayableforsecuritiespurchasedandinterestpayable.
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ThebalancesofandchangesinthefairvaluesoftheU.S.pensionplans’andpostretirementplans’level3assetsfortheperiods
endedDecember31,2015and2014werenotmaterial.
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International Pension Plans Assets
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OutsidetheU.S.,pensionplanassetsaretypicallymanagedbydecentralizedfiduciarycommittees.Thedisclosurebelowofasset
categoriesispresentedinaggregateforover70definedbenefitplansin27countries;however,thereissignificantvariationinasset
allocationpolicyfromcountrytocountry.Localregulations,localfundingrules,andlocalfinancialandtaxconsiderationsarepartof
thefundingandinvestmentallocationprocessineachcountry.TheCompanyprovidesstandardfundingandinvestmentguidanceto
allinternationalplanswithmorefocusedguidancetothelargerplans.
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Eachplanhasitsownstrategicassetallocation.Theassetallocationsarereviewedperiodicallyandrebalancedwhennecessary.
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Thefairvaluesoftheassetsheldbytheinternationalpensionplansbyassetclassareasfollows:
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FairValueMeasurementsUsingInputsConsideredas FairValueat 
(Millions) Level1 Level2 Level3 Dec.31, 
AssetClass  2015  2014  2015  2014  2015  2014  2015  2014 
Equities                 
Growthequities $ 718 $ 672 $ 195 $ 176 $ — $ — $ 913 $ 848 
Valueequities  494  595  27  23  —  —  521  618 
Coreequities  31  19  671  624  4  4  706  647 
Equities,valuedatnetassetvalue*               17   18 
TotalEquities $ 1,243 $ 1,286 $ 893 $ 823 $ 4 $4$ 2,157 $ 2,131 
FixedIncome                 
Domesticgovernment $ 283 $ 87 $ 346 $ 533 $ 4 $ 3 $ 633 $ 623 
Foreigngovernment  —  45  206  670  —  —  206  715 
Corporatedebtsecurities  30  1  661  701  10  12  701  714 
Fixedincomesecurities,valuedatnetassetvalue*               770   863 
TotalFixedIncome $ 313 $ 133 $ 1,213 $ 1,904 $ 14 $15 $ 2,310 $ 2,915 
PrivateEquity                 
Realestate $ 1 $ 3 $ 5 $ 5 $ 4 $ 4 $ 10 $ 12 
Realestate,valuedatnetassetvalue*        126  119 
Partnershipinvestments*             24  23 
TotalPrivateEquity $ 1 $ 3 $ 5 $ 5 $ 4 $4$ 160 $ 154 
AbsoluteReturn                 
Derivatives $(2)$ — $ 15 $(4)$ — $ — $ 13 $(4)
Insurance   —   —   —   —   456   476   456   476 
Other   —   —   4  10   3  3  7  13 
Other,valuedatnetassetvalue*             1  3 
Hedgefunds*             119  117 
TotalAbsoluteReturn $(2)$ — $ 19 $ 6 $ 459 $479 $ 596 $ 605 
CashandCashEquivalents                 
Cashandcashequivalents $ 126 $ 161 $ 347 $ 29 $ — $ — $ 473 $ 190 
Cashandcashequivalents,valuedatnetassetvalue*             1  3 
TotalCashandCashEquivalents $ 126 $ 161 $ 347 $ 29 $ — $ — $ 474 $ 193 
Total $ 1,681 $ 1,583 $ 2,477 $ 2,767 $ 481 $502 $ 5,697 $ 5,998 
Otheritemstoreconciletofairvalueofplanassets              $(28)$(41)
Fairvalueofplanassets              $ 5,669 $ 5,957 
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